The Central Government today said it will provide a special assistance of Rs 1,000 crore during the current financial year for development of Andhra Pradesh. The government had in Budget 2015-16 provided tax incentives to the state.The funds will be utilised for the development of backward districts of Andhra Pradesh and creation of its new capital, including the Raj Bhawan, the High Court, the Secretariat, the Legislative Assembly, the Legislative Council, and other essential infrastructure.

"The central government has announced a further Special Assist of Rs 1,000 crore during the current financial year 2015-16," a finance ministry statement said.

This will include Rs 350 crore for development of seven backward districts covering Rayalaseema and North Coastal region, Rs 350 crore for the new capital and Rs 300 crore for Polavaram irrigation project.

The Andhra Pradesh Reorganisation Act, 2014, bifurcated the state, with the creation of Telangana taking effect from June 2, 2014.

"The central government is required to make appropriate grants and also provide adequate benefits and incentives in the form of special assistance to backward areas of the state," the statement said.

Accordingly, Rs 4,403 crore was released to the successor state of Andhra Pradesh during 2014-15, it added.